We welcome the opportunity to be here today to discuss life insurance and explore ways to enhance understanding and confidence in this critical sector. 

Our presence here today is also a chance to respond to any questions you may have about our insurance business.

Life insurance is a key element of financial wellbeing, and it becomes most critical in a time of people’s greatest need. 

As a leader in the sector, we have an important role to play in building community trust and confidence in life insurance; in advocating for changes in the system to make it easier for customers to understand and to access, as well as continuing to improve our own products and services.

We are committed to doing the right thing for our customers. 

In 2016 we paid over $1 billion in life and income protection payments to over 20,000 customers.

You would be aware that last year some very significant concerns were raised about CommInsure. We have always taken these concerns seriously.  

We acted immediately to reassure our customers by adding a layer of independence to our claims processes and updating and backdating some of the medical definitions used in our products. 

At that time the CommInsure Board also commissioned a range of reviews to ensure that we had the facts straight. We have now independently and thoroughly investigated the issues raised. 

We released the findings of those completed investigations on Tuesday and we have provided a copy of the Deloitte claims handling report to the Committee. 

The review concluded that it did not “identify any systemic issues relating to historically declined claims” nor “that the Claims Handling processes were designed in a way that could systemically deliver poor customer outcomes.”

Now, we are not perfect and mistakes were identified. For those mistakes that were made, we apologise and we will make it right. Also, at our request, the Report suggested improvements to our claims processes which we are already implementing.

However, the reviews and investigations showed a picture of the business which is vastly at odds with some of the commentary.

• CommInsure does not have a culture of deliberately avoiding paying customers;
• Claims staff do not receive financial incentives for declining claims;
• There is no evidence that medical opinions were tampered with to deny claims;
• Or that doctors are pressured by claims staff to change their opinions to deny claims; and,
• There is no evidence that claims staff ‘cherry pick’ doctors to provide medical opinions to deny claims.

While these findings have reinforced our confidence in our business and in our people this is not a set and forget position - we will continue to implement the recommendations and continue to invest to ensure a better experience for all of our customers. 

In addition to what we are doing in our own business, broader reforms should be considered.

We believe in the value of insurance for customers and support the opt-out model with some recommendations for improvement. We are very fortunate in this country that we have near universal coverage of life insurance for those in full-time employment. This is virtually unheard of anywhere in the world. There are however important mechanisms to get a better balance between retirement outcomes and life insurance that we would like to highlight. 

Other reforms that we would prioritise are reforms that could make life insurance simpler, cheaper, and better for customers, and promote trust and confidence in this sector. 

• Reforms that make insurance simpler for customers to understand are the use of plain English as covered under the Life Code and regulatory assistance to implement standardised definitions;
• Reforms that make insurance simpler and lower cost include legal changes to facilitate the ability to rationalise legacy products and reduce the costs to customers;
• Reforms that make insurance better for customers would include the ability to help customers get better by allowing us to provide rehabilitation support. This may help people get back to work earlier, often avoiding the mental health issues of being out of work. 

This inquiry touches on some very important areas of public policy and we look forward to taking your questions.